The RF oscillator using the inverter U1B and 10.7Mhz ceramic filter is driving the parallel combination of U1D to U1F through U1C.Since these inverters are in parallel the output impedance will be low so that it can directly drive an aerial of 1/4th wavelength. Since the output of U1D-U1F is square wave there will be a lot of harmonics in it.
The 9th harmonics of 10.7Mhz (96.3Mhz) will hence be at the center of the FM band. U1A is working as an audio amplifier. The audio signals from the microphone are amplified and fed to the varycap diode. The signal varies the capacitance of the varycap and hence varies the oscillator frequency which produce Frequency Modulation.
